SUPREME COURT OF FLORIDA SUPREME COURT CASE NO. SC DISTRICT COURT CASE NO. 3D L.T. CASE NO

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1 SUPREME COURT OF FLORIDA SUPREME COURT CASE NO. SC DISTRICT COURT CASE NO. 3D L.T. CASE NO BARBARA J. TUCKER, Petitioner, vs. LPP MORTGAGE LTD., f/k/a LOAN PARTICIPANT PARTNERS, LTD. Respondent. PETITION FOR DISCRETIONARY REVIEW OF THE THIRD DISTRICT COURT OF APPEAL PETITIONER S BRIEF ON JURISDICTION Manuel Arthur Mesa, Esq. MESA & ASSOCIATES, P.A. 730 Northwest 107 th Avenue, Suite 115 Miami, Florida Telephone: (305) Telefax: (305) Counsel for Petitioner

2 TABLE OF CONTENTS Table of Citations Page ii Introduction.. 1 Statement of the Case and Facts Summary of Argument. 4 Argument Section I The Third District s decision expressly and directly conflicts with decisions of this Court and other District courts which held that Mortgages are not interests in Real Property. Conclusion.. 9 Certificate of Service 10 Certificate of Compliance. 11

3 TABLE OF CITATIONS LPP Mortgage v. Cravero, 851 So. 2d 897 (Fla. 4thDCA 2003).....8,9 Pelle v. Glantz 349 So. 2d 732 (Fla. 3DCA 1977). 5 Seminole County v. M.G. Invests. of Orlando, Inc.2,7,8 714 So. 2 nd 1066 (Fla. 5 th DCA 1998) Shavers v. Duval County, 73 So. 2d 684 (Fla. 1945).... 2,7,8 United of Florida v. Illini, 341So. 2d 793 (Fla. 2DCA 1977).2,7 United State v. Thornburg, F. 3d 886 (9 th Cir. 1996) Other Authorities: Article V, Section 3(b)(3), Fla. Constitution U.S.C ,8 Rule (a)(2)(a)(iv)..1

4 INTRODUCTION Petitioner, BARBARA J. TUCKER, through counsel, submits her Brief on Jurisdiction pursuant to Florida Rule of Appellate Procedure (a)(2)(a)(iv). This Honorable Court has jurisdiction pursuant to article V, Section 3(b)(3) of the Florida Constitution because the Third District s decision on rehearing in this case expressly and directly conflicts with the decisions of this Court and other District Courts of Appeal.

5 Statement of the Case and Facts The appeal before the Third District Court arose from the Trial Court s Order denying Respondent s Motion for Summary Judgment and entering Final Judgment in favor of Petitioner. Respondent filed an action to foreclose a Small Business Administration mortgage as assignee, against Petitioner s home eleven years after the alleged breach of the promissory note occurred. The Trial Court applied the Federal Statute of Limitations and found the action to be barred by 28 U.S.C. 2415(a), which provides six years to file suit on a promissory note. On appeal, Respondent argued that 28 U.S.C. 2415(c) is controlling because it allows the federal government an unlimited time to bring an action to establish title to, or right of possession in real property. The Third District initially ruled in favor of the Petitioner, citing this Court s opinion in Shavers v. Duval County, 73 So. 2d 684 (Fla. 1954) and the District Court opinions in United of Fla., Inc. v. Illini Fed. Sav. & Loan Ass n., 341 So. 2d 793 (Fla. 2d DCA 1977), and Seminole County v. M.G. Invests. of Orlando, Inc., 714 So. 2 nd 1066 (Fla. 5 th DCA 1998), recognizing that mortgages are not interests in real property. On Motion for Rehearing, the Third District Court withdrew its initial opinion and substituted it with another opinion with one Judge dissenting, citing a federal court opinion which indicates that the Unites States has an unlimited

6 right to foreclose. See, e.g. United States v. Thornburg, 82 F. 3d 886 (9 th Cir. 1996). The Third District Court s opinion dated November 10, 2010 and the prior opinion referenced therein are attached in the Appendix.

7 Summary of the Argument The Third District s decision conflicts with this Court s decision in Shavers v. Duval County, 73 So. 2d 684 (Fla. 1954), as well as the decision of other District Courts in Seminole County v. M.G. Invests. of Orlando, Inc., 714 So. 2 nd 1066 (Fla. 5 th DCA 1998) and United of Fla., Inc. v. Illini Fed. Sav. & Loan Ass n., 341 So. 2d 793 (Fla. 2d DCA 1977), wherein the Courts recognized that mortgages are not interests in real property. The Third District s decision is relying upon United State v. Thornburg, 82 F. 3d 886 (9 th Cir. 1996), creates a conflict with Florida s definition of a mortgage, by equating a mortgage with an interest in real property.

8 ARGUMENT The Third District s decision expressly and directly conflicts with decisions of this Court and other District Courts which held that Mortgages are not interest in Real Property. Petitioner respectfully submits that the majority of the Third District panel in its second opinion failed to follow the decisions of this Court and those of other Districts by applying 28 U.S.C. 2415(c) to the instant case. 28 U.S.C. 2415(c) can only apply if mortgages are interests in real property. However, this Court has ruled that mortgages are not interests in real property. Florida law provides that a mortgage is a form of security that is used to collect on a debt as evidenced by a promissory note. The note is separate and apart from the mortgage and is the primary obligation between the parties. See e.g. Pelle v. Glantz, 349 So.2d 732 (Fla. 3DCA 1977). The note is used to establish and liquidate the debt. The mortgage is utilized to permit a creditor to collect on that liquidated debt by selling property to pay the debt. The mortgage is used if the debt is liquidated and the debtor has insufficient assets to pay the debt. Therefore, a mortgage foreclosure case depends upon a debt being liquidated. Debts evidenced by promissory notes are liquidated by the creditor filing suit against a debtor, thereby establishing the amount of the debt. Florida law provides a five year statute of limitations to sue on a promissory note to establish and liquidate the debt. The United States Code provides a six year statute of

9 limitations for the U.S. Government to obtain the same relief. Without first liquidating the debt, the creditor cannot foreclose on property. Here, the Respondent conceded that the statute of limitations lapsed on the filing of a suit to collect on the promissory notes since it was filed eleven years after the alleges cause of action occurred. However, Respondent successfully argued that no statute of limitations applied to it under 28 U.S.C. 2415(c). 28 U.S.C provides in pertinent part: Sec Time for commencing actions brought by the United States (a) Subject to the provisions of section 2416 of this title, and except as otherwise provided by Congress, every action for money damages brought by the United States or an officer or agency thereof which is founded upon any contract express or implied in law or fact, shall be barred unless the complaint is filed within six years after the right of action accrues or within one year after final decisions have been rendered in applicable administrative proceedings required by contract or by law, whichever is later: *** (c) Nothing herein shall be deemed to limit the time for bringing an action to establish the title to, or right of possession of, real or personal property. [Emphasis ours]. The Third District ruled that section 2415 ( c) is controlling. Petitioner argues that section 2415 (a) precludes the foreclosure because it renders Respondent legally barred from liquidating the debt which is the primary obligation between the parties, and a condition precedent to the remedy of foreclosure.

10 Although several courts have construed 28 U.S.C. 2415( c) to apply to foreclosure actions, section 2415 (c ) does not mention foreclosure cases. The Courts that have so construed section 2415( c) have focused on the language which provides that there is no time limit on the U.S. Government bringing an action to establish the title to, or right of possession of, real or personal property. They have in essence construed mortgages foreclosure actions to be actions to establish the title to or right of possession in real property. However, the Second District Court of Appeal and this Honorable Court have found that mortgages are not interests in real property. See, United of Florida, Inc. v. Illini Federal Savings & Loan Association, 341 So.2d 793 (Fla. 2DCA 1977); and Shavers v. Duval County, 73 So.2d 684 (Fla. 1945). In United of Florida, Inc. v. Illini, the Court stated: In our judgment United's claim must take priority, because we do not believe it can be said that a mortgage is an interest in real property. Consequently, the assignee of a mortgage could not thereby acquire 'an interest in real property' as specified in Section (5), Florida Statutes. Florida is a lien theory state. Section , Florida Statutes (1975), provides: 'A mortgage shall be held to be a specific lien on the property therein described, and not a conveyance of the legal title or of the right of possession.' On more than one occasion our Supreme Court has held that a mortgage does not create an interest in real property but is rather a chose in action creating a lien on the property. E.g., Shavers v.

11 Duval County, 73 So.2d 684 (Fla.1945); Waldock v. Iba, 114 Fla. 786, 153 So. 915 (1934). 2 Boyer, Florida Real Estate Transactions, Sec , states: 'At common law, the mortgagee was vested with legal title, the mortgage operating as a conveyance subject to defeasance, but in Florida, the mortgage does nothing more than create a lien upon the land of the mortgagor.' Apropos to the instant case, the Supreme Court said in Garrett v. Fernauld, 63 Fla. 434, 57 So. 671 (1912): 'An assignment of a mortgage lien is not 'a conveyance' or a 'transfer' of 'any interest' in land covered by the mortgage, but is only an assignment or transfer of the lien created by the mortgage;...' Id. at 794. There is a conflict between the definition of a mortgage under Shavers and the definition that other Courts have used to be able to construe 28 U.S.C (c ) in the fashion that they have, and which was applied by the Third District. Indeed, the Fourth District s Opinion in LPP Mortgage v. Cravero, 851 So. 2d 897 (4 th DCA 2003), replied upon by the Third District, illustrates the conflict with this Court where it provides that the federal statute of limitations does not apply to actions to establish title to real property. Id. Given this conflict and the actual language of the U.S. Code provisions, the Third District s decision was incorrect and should be reversed. Conclusion Petitioner respectfully requests the Court to invoke its jurisdiction for the

12 purpose of reversing the Third District s decision and affirming the Trial Court s order entering Final Judgment in favor of the Petitioner. Respectfully submitted, MESA & ASSOCIATES Manuel Arthur Mesa 730 N.W. 107 th Avenue, Suite 115 Miami, Florida Telephone: (305) Telefax: (305) By: Manuel Arthur Mesa Fla. Bar No

13 CERTIFICATE OF SERVICE WE HEREBY CERTIFY, that a true and correct copy of the foregoing was served upon Dora F. Kaufman, Esq., Liebler Gonzalez & Portuondo, P.A. Courthouse Tower, 25 th Floor, 44 West Flagler Street, Miami, Florida via U.S. mail this day of January, MESA & ASSOCIATES Manuel Arthur Mesa 730 NW 107 th Avenue, Suite 115 Miami, Florida Telephone: (305) Telefax: (305) By: Manuel Arthur Mesa Fla. Bar No

14 CERTIFICATE OF COMPLIANCE Counsel certifies that this brief complies with the font and type requirements of the Florida Rules of Appellate Procedure. Manuel Arthur Mesa